Walt Disney Co. is removing some benefits such as executive car allowances as the world’s biggest entertainment company looks to further boost profitability.
Disney has been reducing costs by cutting hundreds of jobs, closing offices and outsourcing duties like video-game development as it looks to create bigger profit margins and extend a more than doubling of the stock price in the past five years. Rasulo, who has been conducting a company-wide review of expenses, said he’s seeking to modernize operations at Burbank, California-based Disney.
“We looked at the way technology is changing our businesses,” said Rasulo for Bloomberg, who didn’t discuss specifics. “We’re removing vestigial parts.” the CFO added.
More than 120 workers at Disney’s film unit have lost their jobs this year, according to the company. Steve Hulett, a business representative at the Animation Guild, a union representing Disney workers in Burbank, said those let go included employees specializing in hand-drawn animation, as the company is focusing on computer-generated cartoons.
Operating margin increased to 21% from 13% IN 2005, according to data compiled by Bloomberg.
Disney outperformed Wall Street estimates in May with a 32% increase in net income to $1.51 billion for the second quarter ended March 30. The company reports results for the just-ended third quarter on Aug. 6.
Disney jumped 0.5% to $65.36 yesterday in New York. The shares have gained 31% this year, compared with an 18% gain for the Dow Jones Industrial Average.
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